How To Manage A Business Crisis
"That can never happen!"
But what if it does, what if your business faces a crisis?
Bad things do happen, even to good businesses: products fail, funding dries up, key employees leave at the worst time. And when you cannot prevent them, the next best thing is to handle them gracefully and come out in one piece.
Of course, every crisis has its peculiarities, but there are certain techniques that have proved effective for managing different kinds of difficult situations.
1. Make a contingency plan.
A smart entrepreneur faces the reality that difficulties are a part of life and makes plans well in advance to handle them. Your contingency plan should be detailed and instructional, providing clear steps your team should take if a business crisis happens. It will help avoid confusion, protect your employees, guide your communication and could save your business from total collapse.
2. Tell your own story.
Depending on the scale of the crisis, you might need to come forward and interact with the press. Be available to answer questions, provide verifiable facts and tell a coherent story. If you don't take control this way, the world will spin your story out of control. It could be useful to engage a PR professional to help structure your communication at this time.
3. Let your employees know.
Don't put your staff's reputations at risk or encourage the spread of dangerous rumours and conspiracy theories by keeping them in the dark. This is a management flaw and it can ruin your business. In the event of a crisis, bring your staff together immediately and brief them honestly about the situation. Let them know that operations must go on (if it can) and that you're counting on them to help the business pull through. Making them partners in dealing with the crisis could keep them motivated through this hard time.
4. Don't forget your customers.
Customers are as much a part of your business as everyone else and they should learn first-hand about the crisis you're facing. Call them or schedule physical meetings to let them know how they might be affected, how you're handling the crisis and how their interests are being protected. Your honesty could keep them loyal regardless of what the situation is and you would have won their respect by keeping them informed no matter the cost to your business.
5. Avoid sentiment and stay focused.
Don't let your emotions get in the way of managing a crisis. You will need to take decisive, sometimes quick action and sentimentalism will only slow you down. For example, if your business needs to be sold to salvage the situation, you should let it go. Emotions will paralyse you if you let them. Keep your attention on making it out and do what needs to be done.
The bottom line:
A crisis is not something to wish upon a business but it's a common occurrence. And while there are ways to keep damage to a minimum during a crisis, nothing beats planning ahead. Effective managers plan ahead.
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